Hawkins Calls for Progressive Tax Reforms to Avoid City Insolvency

“I want to be the next mayor of Syracuse, not its last mayor,” Hawkins said Wednesday referring to the city’s fiscal crisis.

Hawkins said that Syracuse must band together with other cities and towns in the state to demand the ability to enact municipal income taxes and to convince the state to increase revenue sharing. Hawkins said broadening the city’s tax base in these ways would enable it to lower property taxes for local residents.

Since much of the city’s budget pays for services for commuters that then take their paychecks and tax payments home at night to surrounding suburbs, reforms are needed to make them pay their fair share, Hawkins said.

He said progressive tax reforms should include a graduated on tax on incomes made in the city by residents, commuters, and absentee landlords alike. He also called for countywide property tax sharing and a larger share of the county sales tax when that tax-sharing agreement expires in 2020.

“The city is on the brink of insolvency. Syracuse faces a hostile takeover by the state if the city does not generate significant new revenue in the next year or two. A state-imposed financial control board would then run the city for the benefit of its wealthy creditors, not its citizens,” said Hawkins.

Hawkins said that while there are ways that Syracuse can be more efficient in how it spends its money, the root of the city’s financial problems is the same that is experienced by many other cities and towns in the state. Syracuse’s tax base has moved to the suburbs even while most of the good salaried jobs continue in the city. Left behind are the most vulnerable residents with the greatest need for services. Tax exempt properties like universities, hospitals, and four levels of government are concentrated in the city. The state has cut back on revenue sharing while restricting the city’s ability to raise tax revenues.

Noting a recurring $15 to $20 million annual deficit in a nearly $300 million city operating budget, a $34 million property tax yield, and only about $20 million left in the city’s fund balance by the end of the current fiscal year, Hawkins said the next mayor’s first budget may be the last before a financial control board is imposed.

A control board would have the final say on the city budget over the authority of the elected city council and mayor and is likely to impose even more austere budgets on the city, Hawkins said. Yonkers, Buffalo, Erie County, and Nassau County are currently under financial control boards.

In the late 1970s, the state shared 8 percent of state revenues with local governments. That share was cut repeatedly over the decades to cover state budget deficits and to tax cuts for high-income New Yorkers. Today the share of state revenue shared with local governments is down to a half percent. The city currently receives $71.7 million in revenue sharing called Aid and Incentives to Municipalities (AIM).

“The other three mayoral candidates are not being fiscally responsible to suggest that the city can manage with its current revenue base or expand the property tax base through economic development in time to avoid insolvency,” Hawkins said.

Hawkins said a graduated city income tax averaging 1 percent of income would generate about $30 million a year from the city’s $2.8 billion annual payroll. Nationwide, nearly 5,000 local jurisdictions in 17 states have local income taxes. In New York State, Yonkers and New York City have city income taxes. Hawkins said that it is only fair for the over 40,000 daily commuters to contribute to the city infrastructure and services they use like streets, water, and police.

Hawkins said his long term goal was to shift the tax base to more progressive taxes so city could lower property taxes that fall hardest on tenants and homeowners on low or fixed incomes.

To save on city’s health care costs, Hawkins supports enacting a state single payer health care system. The NY Health Act would save the city operations budget $42 million a year as well as $38 million for the school budget, according to calculations Hawkins released last May.

Hawkins wants to increase the percentage that the city receives from the county sales tax, presently only 24%. He also advocates that local governments in the county share property taxes as was recommended by the Consensus Commission. Modeled after a similar program in the six-county St. Paul/Minneapolis region operating since 1971, it is designed to equalize fiscal capacity among the county's municipalities and enable all municipalities to benefit from property development anywhere in the county.

Hawkins called for the state to comply with judicial decisions to increase school aid funding to Syracuse. New York shortchanged Syracuse schools by $83 million this year below the Foundation Aid Formula enacted in 2007.

Hawkins has an 85-issue, 20,000-word platform on his campaign website (www.howiehawkins.org) that provides background information for his policy proposals. He said he will be discussing other policies that distinguish him from the other mayoral candidates in the coming weeks.